By Ryan Hanrahan
Reuters reported that “the U.S. Treasury Department on Tuesday issued a proposed rule governing how biofuel makers can access a $1-per-gallon tax credit for low-carbon transportation fuels, including aviation fuel.”
“The rule was welcomed by biofuel trade groups that said the plan could provide more certainty for producers of ethanol, biodiesel and other products seeking the credit,” Reuters reported. “The program, dubbed 45Z, was created under former President Joe Biden’s Inflation Reduction Act and was amended last year in President Donald Trump’s One Big Beautiful Bill.”
“Changes included allowing for low-carbon fuel produced with feedstocks grown in Canada and Mexico as well as tweaks to the methodology for calculating a feedstock’s land use intensity,” Reuters reported. “‘Today’s 45Z proposed rule is a step in the right direction toward providing the clarity and certainty that ethanol producers are seeking,’ said Geoff Cooper, president and CEO of the Renewable Fuels Association.”
Progressive Farmer’s Todd Neeley reported that “a public hearing is scheduled for May 28, 2026, with requests to attend the hearing due on May 26, 2026, according to the proposal.”
“The proposal also calls for integrating a feedstock carbon intensity calculator under development by USDA. This will allow for carbon intensity adjustments for feedstocks produced using no-till farming, cover crops and nutrient management practices,” Neeley reported. “So, farmers producing corn and soybeans or other feedstocks with lower carbon intensity would benefit from making the crops more valuable to biofuels producers seeking higher credits.”
Source : illinois.edu